Manufacturers object to safeguard measures on 2 key plastic raw materials
MANUFACTURERS said they oppose the imposition of safeguard duties on imports of two key raw materials for making plastic goods — high-density polyethylene (HDPE), used in bottles and pipes, and linear low-density polyethylene (LLDPE), used in bags, toys and containers.
Danny Ngo, Philippine Plastics Industry Association, Inc. president, said in a statement Monday that the safeguard measures will trigger price hikes in commodities that use such plastics for packaging, such as food, beverages, cosmetics, personal and home care goods, and medicine.
Mr. Ngo said safeguard duties on HDPE and LLDPE will also make his industry uncompetitive against imported products.
“The move is very untimely (due to the pandemic) … businesses at present are still recovering from losses, while the majority of Filipinos have been battered by the series of lockdowns and mobility restrictions which forced many livelihood activities to stop,” Mr. Ngo said.
Republic Act 8800, or the Safeguard Measures Act, authorizes regulators to impose safeguard duties if domestic industries are harmed by a surge in competing imports.
On Sept. 17, the Department of Trade and Industry (DTI) issued Department Administrative Order No. 21-05, making note of petitions by the petrochemicals industry, represented by JG Summit Petrochemical Corp. (JGSPC), for safeguard measures on imported HDPE and LLDPE.
The Tariff Commission will conduct a formal investigation to determine the extent of the harm done to domestic industry, with two separate preliminary conferences set to be held on Oct. 7.
“The DTI has established the existence of a causal link between increased imports of the products and serious injury to the domestic industry,” according to the order.
Mr. Ngo said the issue emerged when JGSPC started failing to deliver orders of HDPE and LLDPE to its manufacturing clients.
“The lapses have created a severe shortage of raw materials that significantly disrupted the supply chain in the downstream plastic sector,” Mr. Ngo said.
“This alarming situation inadvertently compelled plastic converters to source their raw material from stable and steady foreign suppliers so that their plants will continue to operate. Many had stopped or had been operating partially due to the severe raw material shortage,” he added.
According to Mr. Ngo, the petitions will adversely affect downstream enterprises.
“About 417 plastic downstream enterprises employing more than 23,000 workers will be severely affected should the government decide in favor of the sole giant company,” Mr. Ngo said.
“More than 23,000 consumer products manufacturers, with an aggregate 343,262 workers, (accounting for) about P1.79 trillion of national output, and the 110 million Filipino consumers will be deleteriously affected by this additional cost,” he added. — Revin Mikhael D. Ochave